Amtrak Loses Tens of Millions from Free Food

Amtrak’s millions of dollars lost on food and beverage service last year were almost completely due to offering free meals on its long-distance trains. The taxpayer-supported company lost $72 million from food-service last year, according to testimony offered by Inspector General Ted Alves to a House Oversight and Government Reform Committee hearing.

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Alves testified, “Amtrak’s operating losses on food and beverage services have been a long-standing issue, and they contribute directly to the need for federal subsidies to support operations.”

The Government Operations Subcommittee’s chairman, Florida Republican John Mica, concurred, saying, “Somehow some of this has to be revised.” He added that some of the money that Amtrak said it had accrued in its food and beverage finances were from increased ticket revenue rather than the food service itself. He concluded,

“The Amtrak Inspector General has confirmed that Amtrak cooked the books to cover up food service losses that now approach $1 billion.”

Amtrak’s Auto Train from Virginia to Florida gives free wine and cheese to its passengers, and the same treat is bestowed on three long-distance routes for sleeper-car passengers, according to Alves, who said the cost for Amtrak was $428,000 in 2012. He also said Amtrak employees who used the train received roughly $260,000 in free meals on the Auto Train.

Alves was disputed by Thomas Hall, the railroad’s customer service chief, who insisted that Amtrak will be out of the red on food service within the next five years, and added that losses in food service are down 30% since 2006. He stated that if Amtrak reduced food service on its high-speed Acela trains, it would lose even more money from ticket sales.

Gerald Connolly, (D-Va) said the inspector general’s conclusions were of “dubious value,” and continued that the long-distance trains that Congress requires Amtrak to run are the culprit losing money, not the café cars on Amtrak’s Northeast corridor between Washington and Boston.

State-run trains in Maine and Alaska pay $7.75 to $13 an hour with no benefits for their employees: an on-board Amtrak employee makes $41.19 an hour with benefits.